Commercial property 'still attractive to investors'

Commercial property is an "attractive investment" but needs to be handled diligently, one expert has said.

According to Mat Oakley, chairman of the British Council of Offices, although recent legislation increasing business rates on unoccupied properties from 50 per cent to 100 per cent could impact upon profitability, most investors "buy property with an income stream attached".

This means financial risk only occurs about every five years when a tenant leaves the building or rent is reviewed, he explained.

However, "even if the market rental-wise is crashing, the rent never goes down, which is why people love it [commercial property]", the expert continued.

"It [commercial property] is an attractive investment but ... you need to apply the same degree of diligence to selecting your asset as you would to investing in equities or anything else," Mr Oakley concluded.

According to research commissioned by Investec Private Bank’s Structured Property Finance division, out of 137 property professionals questioned in April, the majority (57 per cent) said commercial property values, after falling in the first part of the year, will begin to stabilise.

Martin Slowe Property Services are Commercial Property Consultants offering a full range of Commercial Property Services.